Question 1

How does optimization software help retailers in taking markdowns?

Accepted Answer

A)   It gives retailers the point at which it is optimal to job-out and consolidate.
B)   It updates pricing based upon actual sales and factors in differences in price sensitivities.
C)   It continually updates buyers on sales by price beginning at the point of sale.
D)   It dictates markdown merchandise into one percentage markdown per week in the store.
E)   It indicates markdowns based on how long the merchandise has been in the store.F) B) and C)
G) All of the above

Question 2

Because of markdowns,discounts to employees and customers,and merchandise reductions,_____.

Accepted Answer

A)   the actual selling price is lower than the initial sales price
B)   the maintained markup is always less than the gross margin
C)   the total revenue becomes equal to the total cost
D)   the value of average inventory at cost is less than its receipt value
E)   the initial markup is always lower than the maintained markupF) C) and D)
G) A) and D)

Question 3

Why was odd pricing used in the early twentieth century?

Accepted Answer

A)   Odd pricing saved on distribution costs.
B)   It was used to increase traffic flow into stores.
C)   It offered a limited number of predetermined price points making pricing easier.
D)   It eliminated confusion when a customer shopped in different locations.
E)   It reduced losses due to employee theft.F) A) and B)
G) D) and E)

Question 4

Which of the following statements is a limitation of the rule-based approach to taking markdowns?

Accepted Answer

A)   The rule-based approach is based upon gross margin.
B)   The approach prohibits input from the vendor.
C)   The approach does not follow a fixed schedule.
D)   It does not consider the demand for merchandise at different price points.
E)   The approach assumes that items in a category do not exhibit the same behavior.F) B) and D)
G) B) and E)

Question 5

Retailers collect price data about their competitors to:

Accepted Answer

A)   see if they need to adjust their prices.
B)   match supply and demand.
C)   maximize their sales and profits by means of yield management.
D)   assess the quality of services provided.E) C) and D)
F) A) and B)

Question 6

Initial markup is the actual sales realized for the merchandise minus its costs.

Accepted Answer

A) True 
 B)False

Question 7

Describe geofencing.

Accepted Answer

Today,growing numbers of consumers are o...

Question 8

Which of the following statements on markdowns is FALSE?

Accepted Answer

A)   Markdowns are an unnecessary part of business if planned correctly.
B)   Markdowns are an opportunity to increase sales.
C)   Promotional markdowns increase customer flow.
D)   If markdowns are too low the buyer may be not purchasing enough merchandise.
E)   If markdowns are too low the buyer may be pricing their merchandise too low.F) A) and B)
G) A) and E)

Question 9

Charging each individual customer a different price based on their willingness to pay is called _____.

Accepted Answer

A)   first-degree price discrimination
B)   second-degree price discrimination
C)   third-degree price discrimination
D)   odd pricing
E)   leader pricingF) All of the above
G) A) and B)

Question 10

Which of the following is set by vendors by withholding benefits such as cooperative advertising or even refusing to deliver merchandise to noncomplying retailers?

Accepted Answer

A)   Predatory pricing
B)   Horizontal pricing
C)   Bait and switch
D)   Vertical pricing
E)   MSRP pricingF) B) and C)
G) A) and B)

Question 11

The approach of using 50 percent markup is known as _____ because of which the retail price would be double the cost.

Accepted Answer

A)   activity costing
B)   keystoning
C)   budget costing
D)   cost plus costing
E)   regular costingF) A) and C)
G) B) and D)

Question 12

_____ is the actual sales realized for the merchandise minus its costs of the merchandise sold.

Accepted Answer

A)   Total profit
B)   Net profit margin
C)   Fixed price
D)   Maintained markup
E)   Initial mark-upF) A) and E)
G) C) and E)

Question 13

Showrooming enables customers to shop online.

Accepted Answer

A) True 
 B)False

Question 14

Price elasticity is the percentage change in quantity sold divided by the percentage change in price.

Accepted Answer

A) True 
 B)False

Question 15

When making a good markdown decision,a retailer should:

Accepted Answer

A)   work closely with its vendors and share the financial burden of the markdowns.
B)   only trust its own tastes and intuitions when stocking merchandise.
C)   rely exclusively on computer software designed for optimal pricing.
D)   consider only the rules-based approach because it has proven its reliability.
E)   look to limit them as markdowns hinder customer loyalty.F) B) and C)
G) A) and C)

Question 16

Buyers generally do not plan for markdowns.

Accepted Answer

A) True 
 B)False

Question 17

What legal and ethical pricing issues need to be considered when retailers set their prices?

Accepted Answer

Retailers consider certain legal and eth...

Question 18

What are the ways markdown merchandise can be consolidated?

Accepted Answer

Markdown merchandise can be consolidated...

Question 19

Periodic price audits are completed at retail stores to ensure that the:

Accepted Answer

A)   prices are high enough to cover costs.
B)   prices are lower than the competition.
C)   extent and cause of scanning errors are identified.
D)   product is priced consistent with the company's pricing policy.E) A) and D)
F) All of the above

Question 20

At the new toy store that opened near his home,Ryan noticed all the products were priced at $.49,$.79,or $.99 endings.What type of pricing is the store following?

Accepted Answer

A)   Odd pricing
B)   Unit pricing
C)   Horizontal pricing
D)   Mixed pricing
E)   Promotional pricingF) A) and E)
G) A) and D)

Exam 14: Retail Pricing

Price elasticity is the percentage change in quantity sold divided by the percentage change in price.

Correct AnswerverifiedShow Answer

_____ is the actual sales realized for the merchandise minus its costs of the merchandise sold.

Correct AnswerverifiedShow Answer

What are the ways markdown merchandise can be consolidated?

Correct AnswerverifiedMarkdown merchandise can be consolidated...View AnswerShow Answer

Which of the following is set by vendors by withholding benefits such as cooperative advertising or even refusing to deliver merchandise to noncomplying retailers?

Correct AnswerverifiedShow Answer

Showrooming enables customers to shop online.

Correct AnswerverifiedShow Answer

Which of the following statements on markdowns is FALSE?

Correct AnswerverifiedShow Answer

Because of markdowns,discounts to employees and customers,and merchandise reductions,_____.

Correct AnswerverifiedShow Answer

Periodic price audits are completed at retail stores to ensure that the:

Correct AnswerverifiedShow Answer

Why was odd pricing used in the early twentieth century?

Correct AnswerverifiedShow Answer

Buyers generally do not plan for markdowns.

Correct AnswerverifiedShow Answer

Initial markup is the actual sales realized for the merchandise minus its costs.

Correct AnswerverifiedShow Answer

When making a good markdown decision,a retailer should:

Correct AnswerverifiedShow Answer

Charging each individual customer a different price based on their willingness to pay is called _____.

Correct AnswerverifiedShow Answer

Which of the following statements is a limitation of the rule-based approach to taking markdowns?

Correct AnswerverifiedShow Answer

The approach of using 50 percent markup is known as _____ because of which the retail price would be double the cost.

Correct AnswerverifiedShow Answer

At the new toy store that opened near his home,Ryan noticed all the products were priced at $.49,$.79,or $.99 endings.What type of pricing is the store following?

Correct AnswerverifiedShow Answer

What legal and ethical pricing issues need to be considered when retailers set their prices?

Correct AnswerverifiedRetailers consider certain legal and eth...View AnswerShow Answer

How does optimization software help retailers in taking markdowns?

Correct AnswerverifiedShow Answer

Retailers collect price data about their competitors to:

Correct AnswerverifiedShow Answer

Describe geofencing.

Correct AnswerverifiedToday,growing numbers of consumers are o...View AnswerShow Answer

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Markdown merchandise can be consolidated...
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Retailers consider certain legal and eth...
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Today,growing numbers of consumers are o...
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